For the first time in history, Australia has a seriously rich Prime Minister. But with this first comes the dilemmas that have plagued wealthy US presidents for decades.

How should he manage his investments while in office? Do they raise any ethical issues? Is there potential for conflict of interest? What about spousal and family interests? How does one deal with business leaders who were once business colleagues? Is there anything in one's business past that can be dredged up and exploited by political foes?

And then there is that more nuanced question: whether the investments impair a leader's ability to advocate policy effectively. For example would a substantial investment in coal mining make it difficult to advocate effectively for climate change policies?

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This week Labor launched a full throttled attack on Mr Turnbull, who is estimated to have a net worth of about $200 million, zeroing in on two investments in offshore managed funds domiciled in the Cayman Islands.

First couple Malcolm and Lucy Turnbull. Credit:Edwina Pickles

While agreeing the arrangements were legal, Labor hounded Mr Turnbull on whether his personal arrangements would make him soft on making the top end of town pay more tax.

Mr Turnbull responded that "he paid his fair share of tax" on all the earnings from his investments. He also pointed out that several Australian superannuation funds, including Australian Super, where Opposition leader Bill Shorten served on the board, also invest in Caymans-based managed funds.

The experts agree with Mr Turnbull.

PwC tax partner, Peter Collins said that many funds are established in zero tax jurisdictions such as the Cayman Islands so that investors don't have to pay tax twice on the same income.

Prime Minister Malcolm Turnbull's Point Piper mansion is estimated by prestige agents to be one of the country's most expensive homes.

"This is a very common practice globally, legal, and actually maximises the taxes collected by Australia. Australia has a tax information sharing agreement with the Cayman Islands and this ensures that our tax authorities can collect all taxes due," he said

But the political issue for Mr Turnbull is we only have his word that he paid his "fair share" and does he mean the same thing as you and me?

Illustration: Ron Tandberg

Since 1970s US presidents have been releasing their tax returns publicly during the campaign and while in office. It's not a comfortable experience. Republican candidate, Mitt Romney, a former investment banker like Mr Turnbull, initially resisted but eventually succumbed, revealing that in 2011 he had paid an effective tax rate of 14 per cent. He too came under fire over offshore managed funds in tax havens.

Mr Turnbull's office was quick to reject the idea of releasing his tax returns voluntarily.

So what do we know about the Turnbull millions?

"Boring and passive," was how Mr Turnbull described the couple's investment strategy when interviewed by the Australian Financial Review in February.

Most of the Turnbull millions appear to be in overseas managed funds, often run by the rock stars of Wall Street. Virtually all are domiciled in the Caymans. The Turnbulls also invest in exchange traded funds – investment vehicles listed on the stock exchange – so investment decisions are out of the Turnbulls' hands.

Since becoming communications minister in 2013, Mr Turnbull has shifted away from owning shares in Australian companies. The exception is Lucy Turnbull's investment in Prima​ Biomed​, an ASX listed company working on cancer treatments, in which she holds 17 million shares and is the fourth largest shareholder. She is also on the board.

The Prime Minister's department is currently reviewing this investment to see if it gives rise to any potential conflicts.

But "boring" depends on your perspective.

The Turnbulls are part of an investment world which most of us can only look on with envy.

These private equity funds generally only take licks of money with six zeros, and in return promise returns often of 20 per cent a year.

The financial magic is achieved by smart trading, use of exotic instruments, tax minimisation and taking risks, which is why it pays to punt with the smartest brains on Wall street.

Take the Bowery Opportunity Fund, which the Turnbulls invested in in June 2014. It has a minimum buy-in of $US1 million, but its annualised return is 21 per cent a year since 2009. Its business model is to target distressed companies, buy up their debts at a discount and then pursue the creditors, hopefully recouping more of the debt than the price paid for it. Last year Bowery bought $80 million in debts associated with the bankrupted Chicago Tribune and Los Angeles Times and recovered 100¢ in the dollar, a deal which made its investors seriously rich.

Another fund favoured by the Turnbulls is MSD Torchlight, run by billionaire Michael Dell, of Dell computers fame. They are also invested in superstar bond investor Jeffrey Gundlach's​ Doubleline Capital, and in a fund run by Brazilian investment firm 3G Capital, which teamed up with Warren Buffett​ for the $US45 billion ($61 billion) merger of Heinz and Kraft.

Then there is Seven Locks Enhanced fund, run by Andrew Goldman, which is a "twice leveraged" fund with "a short / long equities strategy" in US stocks.

But not all has gone well for the Turnbulls. The US$8 billion Morgan Stanley Real Estate Fund VI, in which the Turnbulls are prominent investors, reported a $5.4 billion loss on its portfolio in 2010 earning the dubious honour of the biggest dollar loss in the history of private-equity real estate investing. The portfolio includes Australian commercial real estate, through its holding in Investa.

There are a couple of Australian funds including Bronte Capital and Pengana Emerging Companies fund – run by Pengana Capital which was founded by Turnbull and Russel Pillemer in 2003. It invests in small listed industrial companies and takes an active role in managing them. In 2008 National Australia Bank bought Turnbull's minority share, though he is still an investor in the fund and lists Pillemer Pty Ltd as a debtor to both him and Lucy.

In a statement, Mr Turnbull said all his investments had been approved under the Ministerial Code of Conduct by the Secretary of the Department of Prime Minister and Cabinet.